Presented by

Kartikey Rastogi
1405001758
 WHAT IS RURAL BANKING ?

It is a form of services that provide solution

to the financial needs of the consumers in
Rural areas.
 OBJECTIVES OF BANKING
SERVICES IN RURAL AREAS

Poverty Alleviation Objectives:

The objectives is to uplift the mass of population residing in
the rural areas who are currently below the poverty line by
extending credit to the smallest-scale economic activity.
Financial Intermediation Objectives:
The approach involves increasing the
accessibility of banking services to the poor in a commercially
sustainable manner.
 EVALUATION OF THE RURAL
BANKING AFTER INDEPENDENCE

Pre-Nationalisation period
The presence of banking sector was very limited.
In 1951 informal credit accounted 70% of rural
lending and less than 1% of rural household debt
came from commercial bank.
Nationalisation of banks
14 Largest Indian commercial banks were
nationalized in 1969.
The central aim was to provide the banking services
to all sections of society.
 RURAL BRANCH
EXPANSION PROGRAM

In 1977 the 1:4 licence rule was implemented.

The contribution of this policy was:
Increased the flow of bank credit & saving to rural
areas.
A total of 30,000 rural branches were opened.
Rural sector accounted for 12.5 lakhs saving A/Cs &
2.5 crores borrowing A/Cs.
The share of bank credit & savings, for rural branches
, rose from 1.5 % and 3% respectively to 15% each.
 ESTABLISHMENT OF NABARD

National Bank for Agricultural and Rural

Development was established in July 1982.
The main aim was to provide credit facilities to the
farmers through co-operatives & regional rural
banks.
They were responsible for all matters concerning
policy , planning & operations in the field of credit
for agricultural & other economic activities in the
rural areas.
 POST-LIBERISATION PERIOD

The 1:4 rule & licence procedure was frozen in

1990.
There was a heavy toll on the balance of the
commercial bank on account of this policy decision.
In 2000 the Indian banking sector accounted for the
rupee equivalent of $26,768 million as deposit &
$10,834 million as loan outstanding.
 CHALLENGES IN MARKETING OF
BANKING SERVICES IN RURAL MARKET

Lack of adequate financial market.

Low value of loans for poor sections.
Lack of collateral.
Low density of population.
Underdevelopment of rural infrastructure.
Lack of financial discipline.
Rural interest subsidy.
 OPPORTUNITIES

Sourcing of agricultural produce from India for global

markets.
Govt. thrust.
Increasing corporate interest in agri-business.
Strengthening loan recovery.
Development of AEZs.
Lower level of NPA in rural areas.
Lower cost of labour , infrastructure & cost of living.
Large untapped market.
 MARKETING STRATEGIES

Developmental marketing.
Variable lending rate.
New product lines & delivery models.
Development of low priced customized ATMs.
ATM enabled kisan credit card.
 MARKETING STRATEGIES contd.

Co-operative promotion.
Developing franchise model.
Partnership with NGOs for financing.
Simple and accessible loan procedure.
 CONCLUSION

All the statistics indicates there is a huge

market for financial services in the rural
areas.
The only thing that the banks have to do is to
develop a rural specific marketing mix.